SENTENCING MEMORANDUM filed by Plaintiff USA as to Defendant Edvard Paronyan — USA v. Ayvazyan et al (Dkt. 975)

Record facts

U.S. District Court for the Central District of California · No. 2:20-cr-00579-SVW · Doc. 975 · 2021-09-20 · Docket on CourtListener

Summary

The government's sentencing position for defendant Edvard Paronyan, No. CR 20-00579-SVW-7, in the U.S. District Court for the Central District of California, filed September 20, 2021 as Document 975 ahead of a September 27, 2021 hearing before the Hon. Stephen V. Wilson. It states that the defendant pleaded guilty on June 11, 2021 to wire fraud under 18 U.S.C. § 1343, Count Six of the First Superseding Indictment, admitting submission of Paycheck Protection Program and Economic Injury Disaster Loan applications to obtain $430,187. The government concurs with the Probation Office's criminal history category of III and offense level of 16, an advisory range of 27-33 months, and recommends 27 months' imprisonment, three years of supervised release, $430,087 in restitution and a $100 special assessment. It opposes the defense arguments for a lower category and a role reduction.

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TRACY L. WILKISON 
Acting United States Attorney 
SCOTT M. GARRINGER 
Assistant United States Attorney 
Chief, Criminal Division 
SCOTT PAETTY (Cal. Bar No. 274719) 
CATHERINE AHN (Cal. Bar No. 248286) 
BRIAN FAERSTEIN (Cal. Bar No. 274850) 
Assistant United States Attorneys 
Major Frauds/Environmental and Community Safety Crimes Sections 
1100/1300 United States Courthouse 
312 North Spring Street 
Los Angeles, California 90012 
Telephone: (213) 894-6527/2424/3819 
Facsimile: (213) 894-6269/0141 
E-mail: 
Scott.Paetty@usdoj.gov 
 
Catherine.S.Ahn@usdoj.gov 
 
Brian.Faerstein@usdoj.gov 
 
JOSEPH S. BEEMSTERBOER 
Acting Chief, Fraud Section 
Criminal Division, U.S. Department of Justice 
CHRISTOPHER FENTON 
Trial Attorney, Fraud Section 
Criminal Division, U.S. Department of Justice 
1400 New York Avenue NW, 3rd Floor 
Washington, DC 20530 
Telephone: (202) 320-0539 
Facsimile: (202) 514-0152 
 
E-mail: 
  Christopher.Fenton@usdoj.gov 
 
Attorneys for Plaintiff 
UNITED STATES OF AMERICA 
 
UNITED STATES DISTRICT COURT 
 
FOR THE CENTRAL DISTRICT OF CALIFORNIA 
 
UNITED STATES OF AMERICA, 
Plaintiff, 
v. 
EDVARD PARONYAN, 
aka “Edvard Paronian” and 
    “Edward Paronyan,” 
 
Defendant. 
No. CR 20-00579-SVW-7 
GOVERNMENT’S SENTENCING POSITION FOR 
DEFENDANT EDVARD PARONYAN; PROOF OF 
SERVICE 
Date:       September 27, 2021  
Time:       11:00 a.m. 
Location:   Courtroom of the Hon. 
Stephen V. Wilson  
 
 
Plaintiff United States of America, by and through its counsel 
of record, the Acting United States Attorney for the Central District 
Case 2:20-cr-00579-SVW     Document 975     Filed 09/20/21     Page 1 of 9   Page ID
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of California, Assistant United States Attorneys Scott Paetty, 
Catherine Ahn, and Brian Faerstein, and Department of Justice Trial 
Attorney Christopher Fenton, hereby files its sentencing position 
regarding defendant Edvard Paronyan. 
The government’s sentencing position is based upon the attached 
memorandum of points and authorities, the presentence investigation 
report, the files and records in this case, and any other evidence or 
argument that the Court may wish to consider at the time of 
sentencing. 
The government reserves the right to file any supplemental 
sentencing positions that may be necessary. 
Dated: September 20, 2021 
Respectfully submitted, 
 
TRACY L. WILKISON 
Acting United States Attorney 
 
SCOTT M. GARRINGER 
Assistant United States Attorney 
Chief, Criminal Division 
 
      /s/ 
 
CATHERINE AHN 
SCOTT PAETTY 
BRIAN FAERSTEIN 
Assistant United States Attorneys 
CHRISTOPHER FENTON 
Department of Justice Trial Attorney 
 
Attorneys for Plaintiff 
UNITED STATES OF AMERICA 
 
 
 
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MEMORANDUM OF POINTS AND AUTHORITIES 
I. 
INTRODUCTION 
Defendant Edvard Paronyan pleaded guilty to committing wire 
fraud in violation of 18 U.S.C. § 1343, as charged in Count Six of 
the First Superseding Indictment.  (ECF 154 (First Superseding 
Indictment), ECF 469 (Plea Agreement), ECF 524 (Minutes of Change of 
Plea)).  Specifically, defendant admitted to fraudulently submitting 
Paycheck Protection Program (“PPP”) and Economic Injury Disaster Loan 
(“EIDL”) applications in order to obtain $430,187 in disaster relief 
funds based on material false statements and omissions.  (Plea 
Agreement at ¶ 11.)  By doing so, defendant deprived vital disaster 
relief programs substantial amounts of money that should have gone to 
one of many businesses struggling, with their employees, to stay 
afloat during a time of economic crisis.  As such, a custodial 
sentence is necessary to meet the sentencing goals of 18 U.S.C. 
§ 3553(a).  The government concurs with the U.S. Probation Office’s 
(“USPO”) calculation of defendant’s criminal history category of III, 
offense level of 16, and further concurs with their recommendation 
that the Court impose a sentence of 27 months’ imprisonment, three 
years’ of supervised release, and order $430,087 in restitution.  
(ECF 802 (UPSO Rec. Letter) at 1-2, 8-10; ECF 803 (Presentence 
Report) ¶¶ 44-61 and 63-72.)   
II. 
RELEVANT FACTUAL AND PROCEDURAL HISTORY 
On March 11, 2021, a grand jury returned a first superseding 
indictment against defendant and seven codefendants, charging 
defendants with one count of conspiracy to commit bank fraud and wire 
fraud, eleven counts of wire fraud, eight counts of bank fraud, and 
one count of conspiracy to commit money laundering.  (ECF 154.)   
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On June 11, 2021, defendant pleaded guilty to Count Six, which 
charged defendant with committing wire fraud related to the transfer 
of approximately $130,187 in PPP loan proceeds from Celtic Bank as a 
result of the submission of a fraudulent PPP application on behalf of 
defendant’s company, Redline Auto Collision.  (Plea Agreement ¶ 11.)  
Among other things, the application falsely inflated the number of 
employees hired by defendant in order to fraudulently increase the 
requested PPP loan proceeds.  (Id.)  Defendant further admitted to 
submitting two false and fraudulent EIDL applications for $150,000 
each: (1) an April 2, 2020 EIDL application on behalf of Redline Auto 
Collision, whose proceeds defendant did not use for business proceeds 
as required and instead transferred to co-defendant Marietta 
Terabelian’s bank account; and (2) a July 16, 2020 EIDL application 
on behalf of a fictitious business listed as “RAC” that contained 
false statements intended, among other things, to hide defendant’s 
actual control of the purported business.1  (Id.)  As a result of 
defendant’s fraud, Celtic Bank suffered an actual loss of $130,187 
and the U.S. Small Business Administration (“SBA”), which administers 
the EIDL program, suffered an actual loss of $299,900.  (Presentence 
Investigation Report (“PSR”) ¶ 40.) 
On July 26, 2021, the USPO filed its Presentence Investigation 
Report, in which it calculated a Criminal History Category of III 
based on one point for a prior conviction for automobile theft and 
 
1 The application listed defendant’s wife as the contact person 
for “RAC,” which was a reference to an acronym for Redline Auto 
Collision.  As noted above, defendant had already submitted an EIDL 
application on behalf of Redline Auto Collision in April 2020, and 
defendant used “RAC” and his wife’s name in order to conceal the fact 
of the earlier application when applying for a second EIDL loan in 
July 2020. 
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two points for driving under the influence of alcohol (“DUI”); 
defendant’s commission of the instant offense while still on 
probation for his DUI conviction further increased his criminal 
history points to five, resulting in an overall criminal history 
category of III.  (PSR ¶¶ 66-72.)  The UPSO further calculated 
defendant’s overall offense level as 16, consistent with the parties’ 
plea agreement.  (PSR ¶ 61; Plea Agreement ¶ 13.)  This is based on a 
base offense level of seven, a loss between $250,000 and $550,000 
resulting in an additional twelve offense levels, and minus three for 
acceptance of responsibility.  (PSR ¶¶ 44-61.)  The USPO further 
calculated and recommended restitution be ordered in the amount of 
$130,187 to Celtic Bank and $299,900 to the SBA, resulting in a total 
restitution amount of $430,087.  (PSR ¶¶ 40, 130-131.) 
On September 13, 2021, defendant filed his sentencing position, 
in which he argues his criminal history category was overstated and 
that this Court should apply a mitigating role offense level 
reduction.  Defendant further contends that this Court should 
sentence defendant to a term of probation or house arrest.  For the 
reasons described below, the government concurs with the USPO’s 
calculation and recommendation of a low-end sentence of 27 months’ 
imprisonment to be followed by a three-year term of supervised 
release, with restitution. 
III. THE GOVERNMENT’S SENTENCING RECOMMENDATION 
A. 
Defendant’s Criminal History Category Is Not Overstated 
Defendant’s criminal history category is not overstated, 
contrary to his assertions in his sentencing memorandum (ECF 963); 
rather, it correctly reflects the greater concern raised by 
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defendants who commit crimes while under supervision for a prior 
crime.  Four of the five points attributed to defendant come from his 
prior DUI conviction; two for the underlying offense and conviction, 
and two for the fact that he committed yet another crime – the 
instant offense – while on probation.  The guidelines are intended to 
reflect, among other things, the concerns and goals raised in 18 
U.S.C. § 3553(a), which include the promotion of respect for the law, 
the need to afford adequate deterrence, and the need to protect the 
public from further crimes of defendant.  18 U.S.C. § 3553(a)(2)(A), 
(a)(2)(B), (a)(2)(C).  Defendant was given a custodial sentence and 
supervision in order to, presumably, reflect the seriousness of his 
crime and ensure he complied with supervision following his fourth 
misdemeanor conviction since the age of twenty.   
The circumstances of the DUI offense are particularly concerning 
– defendant was not only driving while under the influence of 
alcohol, he was charged with doing so while driving in excess of 100 
miles per hour.  Reducing his criminal history category to II would 
effectively erase defendant’s decision to again violate the law – 
this time with the more serious felony offense of wire fraud – while 
still being supervised for his prior conviction.  The government 
therefore recommends that this Court adopt the USPO’s calculation of 
a criminal history category of III based on his five criminal history 
points as correctly calculated under the Guidelines. 
B. 
Defendant Should Not Receive a Mitigating Role Reduction 
The PSR reflects the USPO’s meaningful consideration of whether 
to apply a mitigating role adjustment.  However, as stated in the 
PSR, such an adjustment should only apply if the defendant was 
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“substantially less culpable than the average participant.”  (PSR 
¶¶ 53-55.)  The charge at issue here is a specific wire fraud scheme, 
not the broader conspiracy charged in the superseding indictment.  
Given defendant’s knowing participation in the specific scheme to 
submit fraudulent PPP applications in the name of a company that he 
owns and controls, his decision to share the criminal proceeds by 
transferring funds to his co-defendants, and his decision to further  
seek out more fraudulent loan proceeds through the EIDL application 
on behalf of “RAC,” defendant is not substantially less culpable than 
the average participant.  (Id.)   
Moreover, defendant has pleaded guilty to one count of wire 
fraud relating to the submission of the fraudulent PPP loan 
application in his company’s name, and his sentencing loss amount is 
directly attributable to fraudulent loans he obtained on behalf of 
Redline Auto Collision and the purported “RAC.”  He was neither a 
minor nor minimal participant in this activity such that he is being 
held accountable for loss “that greatly exceeds the defendant’s 
personal gain from a fraud offense.”  U.S.S.G. § 3B1.2 cmt. n.3(A).  
Thus, defendant should not qualify for a mitigating role adjustment 
in this case.  The government recommends that the Court adopt the 
USPO’s calculation of a total offense level of 16 for defendant, 
resulting in an advisory Guidelines range of 27-33 months’ 
imprisonment, with up to three years of supervised release.  (PSR 
¶¶ 120, 122-123.)  
C. 
A Custodial Sentence of 27 Months’ Is Sufficient But Not 
Greater than Necessary to Meet the Goals of 18 U.S.C. 
§ 3553(a) 
The Court should impose a sentence sufficient, but not greater 
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than necessary, to reflect the purposes of sentencing identified in 
18 U.S.C. § 3553(a).  United States v. Carty, 520 F.3d 984, 991 (9th 
Cir. 2008).  The advisory Guidelines range provides the “starting 
point and . . . initial benchmark” for this Court’s consideration of 
an appropriate sentence.  Molina-Martinez v. United States, 136 S.Ct. 
1338, 1345 (2016) (quoting Gall v. United States, 552 U.S. 38, 49 
(2007)).  Although the Guidelines are not binding, they “reflect a 
rough approximation of sentences that might achieve section 3553(a)’s 
objectives.”  United States v. Rita, 551 U.S. 338, 350 (2007). 
Under 18 U.S.C. § 3553(a), in arriving at the appropriate 
sentence, the Court should consider, among other factors, the nature 
and circumstances of the offense and the history and characteristics 
of the defendant, § 3553(a)(1); the need for the sentence imposed to 
reflect the seriousness of the offense, to promote respect for the 
law, and to provide just punishment for the offense, § 3553(a)(2)(A); 
the need for the sentence imposed to afford adequate deterrence to 
criminal conduct, § 3553(a)(2)(B); the need for the sentence imposed 
to protect the public from further crimes of the defendant, 
§ 3553(a)(2)(C); the kinds of sentences available, § 3553(a)(3); and 
the need to avoid unwarranted sentence disparities, § 3553(a)(6). 
In light of the relevant 18 U.S.C. § 3553(a) factors, a sentence 
of 27 months’ imprisonment is sufficient, but not greater than 
necessary, to achieve the goals of sentencing here.  Defendant 
repeatedly submitted fraudulent loan applications seeking hundreds of 
thousands of dollars in disaster relief funds intended to help small 
businesses during the ongoing crisis of COVID-19.  Defendant’s lack 
of need for these funds is reflected in the fact that he transferred 
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$100,000 to his co-defendants after receiving money from the SBA 
through the EIDL program.  His avarice in obtaining further money – 
despite the collapse of businesses all around the Los Angeles area 
and the rise of homelessness from employees losing work – is 
reflected in his submission of yet another EIDL loan, this time for 
“RAC” in a blatant attempt to hide the true name of his business, its 
owner, and his prior receipt of EIDL funds.   
The nature and circumstances of this offense, the seriousness of 
his crime, and the need to promote just punishment all require a term 
of imprisonment.  Defendant’s commission of the instant offense while 
on probation for a DUI further reflects the need for a term to deter 
him from future crimes, promote respect for the law, and protect the 
public.  While the government understands that financial hardship may 
result from defendant’s incarceration, imprisonment under these 
circumstances is a necessary, but just, reflection of his crime.  
Actions breed consequences, and defendant should not be allowed to 
escape the consequences of his serious offense.  As such, a low-end 
guidelines sentence of 27 months, followed by a lengthy term of three 
years of supervision, is sufficient but not greater than necessary to 
meet the goals of 18 U.S.C. § 3553(a). 
IV. 
CONCLUSION 
For the aforementioned reasons, the government respectfully 
requests that the Court sentence defendant to 27 months’ imprisonment 
and three years of supervised release with the terms and conditions 
recommended by the USPO, and further order defendant to pay $430,087 
in restitution along with the mandatory special assessment of $100.  
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